Demonetisation: The Reserve Bank of India has finally opened up on the demonetisation debate after various contradictory claims by both the government and the central bank. While earlier it was reported the Modi government took the decision and virtually imposed it on the RBI, now it seems that is not the case. So, who took the decision to scrap Rs 500 and Rs 1,000 notes? RBI has told the the Parliamentary panel that the note ban was a joint decision taken by both government and the central bank mutually. After a parliament panel was formed to throw light on the exact course of the demonetisation move, the RBI refused to share any specific detail on the same initially. As per media reports, the RBI denied to comment on the demonetisation move made by the central government citing need to maintain secrecy, integrity, security and even danger to life.
After various allegations were thrown at the Modi government and the RBI, the central bank in a 7-page note to Parliament’s Department-Related Committee of Finance headed by Congress leader M Veerappa Moily said that the government, on November 7, 2016, had advised the Reserve Bank of India to crack down on on the triple problems of terrorist financing, black money laundering and currency counterfeiting. And as part of that exercise, the decision to junk Rs 500 and Rs 1,000 notes was taken mutually. Digging deeper into the issue, India Today in its report has revealed what really transpired during the exchanges between the Modi govt and RBI. Check out here all the big revelations from RBI’s note to Parliament panel justifying its stand on the entire demonetisation episode:
1. As per RBI’s note, the decision to demonetise high-value currency was taken mutually by both RBI and the central government.
2. The prime intention to scrap the old currency notes was to stop the counterfeiting business going on in the country as well as abroad. The reason behind launching 2,000 currency notes were chosen in the view of inflation and also to have a seamless currency logistics in the country. The RBI also informed that the printing of new value currency started in June 2016. When the new currency had reached critical minimum stock, the final decision on demonetisation was taken.
3. The Reserve Bank of India mooted the introduction of 5,000 and 10,000 rupee notes as early as October 2014, as soon as the BJP came into power.
4. The new and vivid Rs 2,000 notes design was justified by the RBI. It said that the new design will ‘catch the fancy of the public.’
5. The RBI agrees to the fact that it might not be possible to replace notes fully. RBI has claimed that the demonetisation move had no impact on its balance sheets at all.